UPDATE 1-Antofagasta posts higher quarterly copper output

Reuters Staff

2 Min Read

(adds details on costs, Antucoya project)

LONDON, July 30 (Reuters) - Chilean miner Antofagasta posted a 5 percent quarter-on-quarter increase in its second-quarter copper output, slightly ahead of forecast, as it ramped up production after maintenance dented its first-quarter output.

The London-listed miner, which like others in the copper sector is battling declining ore grades, rising costs and weak metal prices, produced 178,800 tonnes of copper in the second quarter, up 5.5 percent from the previous quarter, when output was hit by plant maintenance at its Los Pelambres and Esperanza operations and declining copper grades.

Production for the first half of 2014 was 348,200 tonnes, slightly ahead of analysts' consensus of 344,000 but down 4.4 percent from the same period a year earlier, mainly due to falling copper grades.

Cash cost before by-product credits rose 3.8 percent quarter on quarter to $1.90 per pound, mainly due to one-off signing bonuses with labour unions at Esperanza.

The miner, controlled by Chile's Luksic family, said it was on track to hit its target of 700,000 tonnes of copper and 270,000 ounces of gold this year with net cash costs of $1.45 per pound.

To battle a fall in production due to aging mines and declining copper grades, Antofagasta is focusing on its $1.9 billion Antucoya greenfield project and brownfield expansions.

It said the construction of Antucoya remained on time and on budget and was 86 percent complete as of the end of June.

The miner hopes a $3 billion investment over the next five years will allow it to increase its output to 900,000 tonnes by 2018 from about 700,000 tonnes currently. (Reporting by Silvia Antonioli; editing by Mark Potter and Jason Neely)